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WPS5316
Policy Research Working Paper
5316
The Washington Consensus
Assessing a Damaged Brand
Nancy Birdsall
Augusto de la Torre
Felipe Valencia Caicedo
The World Bank
Office of the Chief Economist
Latin America and the Caribbean Region
&
Center for Global Development
May 2010
Policy Research Working Paper 5316
Abstract
The authors analyze the Washington Consensus, which
at its original formulation reflected views not only from
Washington, but also from Latin America. Tracing the
life of the Consensus from a Latin American perspective
in terms of evolving economic development paradigms,
they document the extensive implementation of
Consensus-style reforms in the region as well as the
mismatch between reformers’ expectations and actual
outcomes, in terms of growth, poverty reduction, and
inequality. They present an assessment of what went
wrong with the Washington Consensus-style reform
agenda, using a taxonomy of views that put the blame,
alternatively, on (i) shortfalls in the implementation
of reforms combined with impatience regarding their
expected effects; (ii) fundamental flaws—in either the
design, sequencing, or basic premises of the reform
agenda; and (iii) incompleteness of the agenda that left
out crucial reform needs, such as volatility, technological
innovation, institutional change and inequality.
This paper—a product of the a joint product of the Office of the Chief Economist for Latin America and the Caribbean
Region, and the Center for Global Development—is part of a larger effort in the two institutions to understand the
evolution of development policy thinking in Latin America. Policy Research Working Papers are also posted on the Web
at http://econ.worldbank.org. The authors may be contacted at adelatorre@worldbank.org, nbirdsall@cgdev.org, and
fvalencia@worldbank.org....